PR FIRM ACQUIRES BLACK, MANAFORT

ByMaralee Schwartz

January 3, 1991

Burson-Marsteller, an international public relations company, announced yesterday the acquisition of Black, Manafort, Stone & Kelly (BMS&K), the Washington public relations and lobbying firm that had strong ties to the Reagan and Bush administrations.

James H. Dowling, president and chief executive office of Burson-Marsteller, and Charles R. Black, a founding partner of BMS&K, in making the joint announcement, said the acquisition was effective Jan. 1.

"The addition of Black, Manafort, Stone & Kelly to our already substantial Washington presence will provide our clients with direct access to one of the best-known and most accomplished government relations teams ever established in the Washington capital," Dowling said.

Black, Paul Manafort and Roger Stone founded the firm in 1980, and it quickly developed a reputation as one of Washington's most aggressive and controversial. It combined lobbying with campaign consulting and was often in the position of seeking votes from members of Congress for whose campaigns the firm had worked.

The original partners were Republicans, but in the mid-1980s, Peter Kelly, a major Democratic fund-raiser, and James H. Healy, a former aide to House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), joined the firm.

The company received negative publicity during the congressional investigation of political influence over grants from the Department of Housing and Urban Development during the Reagan administration. Manafort acknowledged during the 1989 hearings that work he performed in return for consulting fees on HUD projects could be termed "influence peddling."

Black, who has been volunteering as chief spokesman for the Republican National Committee for the past six months, said BMS&K will focus on building its government relations business. "The firm will not be in the business of political consulting," he said. But Black said he expects individual members to volunteer in some campaigns.

Thomas D. Bell Jr., vice chairman of Burson-Marsteller and head of its Washington operation, said BMS&K will continue to operate as an independent unit within the Burson-Marsteller group in Washington.

Burson-Marsteller, a subsidiary of Young and Rubicam, previously acquired the government relations firm of Gold and Liebengood.

Bell would not say how much Burson-Marsteller paid for BMS&K.

Bell denied the purchase was a reaction to competitor Hill & Knowlton's recent acquisition of Wexler and Reynolds, another well-connected Washington lobbying firm. But he agreed there is "a real trend" toward consolidation among politically connected lobbying and public relations firms that want to "practice governmental relations on a global basis for clients with global needs."